FSA shifts concerns from commission to sales bias

The Financial Services Authority (FSA) has cited a number of potential concerns it believes could lead to consumer detriment as firms make changes to their business models ahead of RDR implementation next year.

Whereas the regulator believes it will put a stop to commission bias as a result of RDR, it said it is now worried about possible 'sales biases', as well as provider influence. The concerns are listed in the regulator's second Retail Conduct Risks Outlook, which also seeks to identify some of the products it believes are more likely to be mis-sold, or mis-bought. The FSA's concerns are: Sales biases While the RDR addresses potential commission bias, a sales bias is likely to persist in cases where the adviser charges fees contingent on a product sale or where charges are paid for ...